Below are the data sources, inputs and calculation used to...

Below are the data sources, inputs and calculation used to determine the intrinsic value for Ionic Rare Earths.

	{caption}ASX:IXR Discounted Cash Flow Data Sources{/caption}
1	Data Point	Source	Value
2	Valuation Model		2 Stage Free Cash Flow to Equity
3	Levered Free Cash Flow	Up to 1 Analyst Estimates on Average (S&P Global)	See below
4	Discount Rate (Cost of Equity)	See below	7.6%
5	Perpetual Growth Rate	5-Year Average of AU Long-Term Govt Bond Rate	2.1%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

	{caption}Calculation of Discount Rate/ Cost of Equity for ASX:IXR{/caption}
1	Data Point	Calculation/ Source	Result
2	Risk-Free Rate	5-Year Average of AU Long-Term Govt Bond Rate	2.1%
3	Equity Risk Premium	S&P Global	5.0%
4	Metals and Mining Unlevered Beta	Simply Wall St/ S&P Global	1.15
5	Re-levered Beta	= 0.33 + [(0.66 * Unlevered beta) * (1 + (1 - tax rate) (Debt/Market Equity))]= 0.33 + [(0.66 * 1.153) * (1 + (1 - 30.0%) (0.0085%))]	1.103
6	Levered Beta	Levered Beta limited to 0.8 to 2.0(practical range for a stable firm)	1.103
7	Discount Rate/ Cost of Equity	= Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)= 2.08% + (1.103 * 5.00%)	7.59%

Discounted Cash Flow Calculation for ASX:IXR using 2 Stage Free Cash Flow to Equity
The calculations below outline how an intrinsic value for Ionic Rare Earths is arrived at by discounting future cash flows to their present value using the 2 stage method. We use analyst's estimates of cash flows going forward 10 years for the 1st stage, the 2nd stage assumes the company grows at a stable rate into perpetuity.

	{caption}ASX:IXR DCF 1st Stage: Next 10 years cash flow forecast{/caption}
1		Levered FCF (AUD, Millions)	Source	Present Value Discounted (@ 7.59%)
2	2024	-12.18	Analyst x1	-11.32
3	2025	-73.08	Analyst x1	-63.13
4	2026	-30.18	Analyst x2	-24.23
5	2027	43.61	Analyst x1	32.54
6	2028	43.18	Analyst x1	29.94
7	2029	43.17	Est @ -0.01%	27.83
8	2030	43.43	Est @ 0.61%	26.02
9	2031	43.89	Est @ 1.05%	24.44
10	2032	44.49	Est @ 1.36%	23.03
11	2033	45.19	Est @ 1.58%	21.74
12	Present value of next 10 years cash flows	A$86.86

	{caption}ASX:IXR DCF 2nd Stage: Terminal Value{/caption}
1		Calculation	Result
2	Terminal Value	FCF2033 × (1 + g) ÷ (Discount Rate – g)= A$45.192 x (1 + 2.08%) ÷ (7.59% - 2.08% )	A$836.85
3	Present Value of Terminal Value	= Terminal Value ÷ (1 + r)10A$837 ÷ (1 + 7.59%)10	A$402.55

	{caption}ASX:IXR Total Equity Value{/caption}
1		Calculation	Result
2	Total Equity Value	= Present value of next 10 years cash flows + Terminal Value= A$87 + A$403	A$489.41
3	Equity Value per Share(AUD)	= Total value / Shares Outstanding= A$489 / 4,281	A$0.11

	{caption}ASX:IXR Discount to Share Price{/caption}
1		Calculation	Result
2	Value per share (AUD)	From above.	A$0.11
3	Current discount	Discount to share price of A$0.020= (A$0.11 - A$0.020) / A$0.11	82.5%